What it takes to be a successful college entrepreneur
BY DANIEL MATTHEWS
In 2004, Brian Laoruangroch from University of Missouri started a business called Green Mobile. He sells refurbished phones, which, according to Inc.com, generates $500,000 a year. In 2007, students at Yale started a company called GXStudios. It raised $1 million in venture capital with an online game called GoCrossCampus. Zac Workman from Indiana University made a healthy energy drink from a family recipe. Justin Cannon and Chris Varenhorst from MIT built a language-learning software for use in classrooms.
College startups are fascinating. How do entrepreneurs run a business when they have so much studying to do? The risk is huge. Your startup could fail and you could fail your classes. Is it even a good idea to try?
Your college years are a great time to become an entrepreneur. You’re still young. You’re not chained to a job just to pay the bills. There are plenty of people around who can help. You have first-hand knowledge of a valuable market—the college market.
You can do this. Let’s dive in to what it takes.
Brainstorm your idea
Each entrepreneur on Inc.com’s list has something in common. They identified a need related to their environment and figured out how to satisfy it. Looking around you, what is it that your fellow students need? What do your professors need? What’s lacking? Talk to your fellow students, and to your professors, and be sure to research what’s already on the market.
Once you’re observing and highly attuned to what’s happening around you, the ideas will pop up unbidden. Be sure to record them on your phone or a notepad.
Nail the basics
Any solid business has an equally solid foundation. Consult a checklist for starting a business to get a good idea of what you’ll need to start. Planning on going it alone? A Sole Proprietorship is fast and easy, but if there’s the possibility of partners you may want to choose a LLC. The quality of your business plan will help you get funding. You’ll look into branding, legal responsibilities, and how to build a good team once things are going.
Develop your plan
Your plan should be as extensive and as well thought-out as possible. There are a good deal of resources available in your school library. The U.S. Small Business Administration has a business plan template covering all the areas.
When writing your business plan, think strategically. Where will you be in three to five years? How will you get there? Who’s your competition? In what ways will your business be unique? How much funding will you need, and how will you get it? How will you continue to earn revenue?
As part of your plan, you’ll need to think about branding and marketing. Uncertainty and volatility in the market are key concerns for startups to consider when developing a brand strategy. Because of these concerns, your brand must be agile and responsive to consumer needs. Facebook, for example, has continually adapted its technology to give users the type of experience they’re looking for, instead of maintaining a static model. Your brand, essentially, is what you offer. It represents you, and should be as adaptable as you are.
Indiana University’s Zac Workman had his family’s help in procuring $200,000 to start his energy drink business. Not all of us are so lucky. Thankfully, crowdfunding and angel investors have become major sources of funding for startups.
Angel investors are accredited investors who provide seed money (anywhere from $20,000 to $100,000 is typical)—but they get a stake in your company. They’re particularly equipped to give you advice, and they like to take risks. Show them a good business plan, sell them on your idea, and you’re in business. But they do have a share of your equity and future profits, and can put a lot of pressure on you to succeed. Look for experienced investors who add value through their expertise and networks.
With crowdfunding, you can raise up to $1 million per year from non-accredited investors. Platforms include IndieGogo, Kickstarter, and GoFundMe. Sites that use the equity model (the same model that applies to angel investors) include AngelList, CircleUp, and Crowdfunder.
Release, market, and sell your product
Now that you’ve received funding and checked off the basics, it’s time to bring your startup to the market. You could do more market research first. But if your branding strategy is agile, you’re prepared to adjust based on how consumers receive your brand.
All of the college entrepreneurs on Inc.com’s list have another thing in common: they’re internet-savvy. You can start off by selling on eBay, but like University of Missouri’s Brian Laoruangroch, you’ll want to develop a website for marketing and sales. A visually appealing website is also essential for your brand.
If you want to do it yourself, there are some great website builders for that. Wix is a fully customizable option with an advanced ecommerce platform. It does cost just over $4 a month. WordPress is free, and there’s a reason 25% of websites use it—you can do pretty much anything with it. You do have to pay for web hosting.
Daniel Matthews is a widely-published writer who specializes in business, lifestyle, and tech. You can find him on Twitter